29 Sep 2014

Effective Tips on How to Make Your Taxes Lower

Every tax payer desires to know how to reduce tax payments. Instead of giving false tax details, try to seek help from the experts. There are multiple ways on how to reduce your taxes. You just have to familiarize each method to have a successful result.
The Adjusted Gross Income (AGI) is a key element in recognizing your taxes. This affects your financial life outside of taxes such as mortgage lenders, banks and college financial aid programs. With great significance of AGI, you have to start your tax planning here.  Simply ask yourself, what goes into your AGI?  This is your income from all sources minus the adjustment incomes. If you have a high total income, you will also have a high AGI. It means that the more money you generate, the more taxes you will pay and vice versa.
To reduce your taxes, the best way that you can do is to lessen your income.  You can do this by contributing money to any retirement plan. Your contribution reduces your income and that lowers your tax bill. In addition, you can also reduce your AGI through several adjustments to income.  These adjustments are deductions. You just have to include a student loan interest paid and any related expenses.  For additional guide, here are the other ways on how to make your taxes lower before the end of the year:
  • If you are paying an estimated income tax to the country you reside in, you can pay your 4th quarter estimated ahead of time. You can do this through paying it in December vs January of the succeeding year. This can help in increasing your state income tax deduction.
  • If you have real estate taxes that are due on February of the succeeding year, you can have the payment in December. Through this, you will increase your real estate tax deduction.
  • Most tax payers take the benefits of holiday seasons. December is a month of gift giving and sharing. Like others, you can make a donation to a recognized charitable organization. This scheme can also help in reducing your tax.
  • In case you want to buy any device for your business, you have to make that purchase in December instead of January. This can help in reducing your tax for the current year.
  •  If you are working for an employer and have a yea-end bonus, you can ask your employer if they could give your bonus in the beginning of January instead of December. This can help in avoiding a high tax pay for the current year.
Upon knowing the different tips on how to reduce your taxes, you don’t have to worry about your tax bills. You can easily pay your tax bill because of its low charges.
Reducing your taxes can be easily done. You just have to think of the best solution to your financial concern.  By considering the above tips, expect that you will be surprised upon receiving your tax bills. So, don’t ignore the above tips and learn how to reduce your taxes now!



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